Accountancy and Book Keeping Questions with solutions MCQs

1. The main source(s) of Generally accepted Accounting Principles(GAAP) is/are:

A

Company Law

B

Accounting Standards

C

Both A and B

D

None of these

Accountancy and Book Keeping Accountancy and Book Keeping
Correct Answer : C
Explanation :

Company Law and Accounting Standards are two main sources of GAAP

Correct Answered :

Wrong Answered :

2. What standards are used to prepare financial statements by most of the Countries and Companies:

A

International Financial Reporting Standards

B

International Financial Accounting Standards

C

International Accounting and Auditing Standards

D

International Risk Reporting Standards

Accountancy and Book Keeping Accountancy and Book Keeping
Correct Answer : A
Explanation :

International Financial Reporting Standards (IFRS) set common rules so that financial statements can be consistent, transparent, and comparable around the world. IFRS are issued by the International Accounting Standards Board (IASB).

Correct Answered :

Wrong Answered :

3. The correct of Accounting Equation is :

A

Assets + liabilities = Equity

B

Assets -Liabilities =Equity

C

Assets -Receivable =Equity

D

Assets + Receivable =Equity

Accountancy and Book Keeping Accountancy and Book Keeping
Correct Answer : B
Explanation :

Shareholder equity = Assets – Liabilities

Correct Answered :

Wrong Answered :

4. A company sold goods worth Rs 5,000 on 5 June and Rs 10,000 on 28 June. The company received the first payment on 25 June and second on 7 July. The company prepared the financial statement on 30 June. What would be the total sale on the financial statement?

A

Rs 0

B

Rs 5000

C

Rs 10000

D

Rs 15000

Accountancy and Book Keeping Accountancy and Book Keeping
Correct Answer : D
Explanation :

Rs 15000

Correct Answered :

Wrong Answered :

5. Advance payments are recognized as:

A

receivable

B

payable

C

bad debt

D

none of these

Accountancy and Book Keeping Accountancy and Book Keeping
Correct Answer : A
Explanation :

The Advance payments are recognized as Receivable.

Correct Answered :

Wrong Answered :

6. What from the following is NOT a current asset?

A

Patent rights

B

Inventory

C

Cash

D

Trade receivables

Accountancy and Book Keeping Accountancy and Book Keeping
Correct Answer : A
Explanation :

A current asset is an asset that a company holds and can be easily sold or consumed and further lead to the conversion of liquid cash.Types of Current Assets: Cash and cash equivalent Inventory Ongoing projects Pre-paid expenses Account receivable Marketable securities

Correct Answered :

Wrong Answered :

7. What from the following is NOT a non-current asset?

A

investments

B

Property

C

Patent rights

D

Inventory

Accountancy and Book Keeping Accountancy and Book Keeping
Correct Answer : D
Explanation :

A non-current asset is an asset that the company acquires or invests, but the value of that investment does not recur within an accounting year.List of Non-Current Assets: Property, plant and equipment:

Correct Answered :

Wrong Answered :

8. What from the following is/are NOT tangible asset(s)? I)Patent rights II)Good Will III)Land

A

I only

B

II only

C

I & II Only

D

I , II and III

Accountancy and Book Keeping Accountancy and Book Keeping
Correct Answer : C
Explanation :

Every business requires assets to run its operations and such assets that help a business in maintaining its daily operations are called tangible assets.Tangible assets can be seen and felt and are also capable of being damaged by fire, natural disaster or any accident. The tangible assets have a clearly defined purchase value or acquisition cost.

Correct Answered :

Wrong Answered :

9. A machine price was Rs 1,000 and was carried through a truck. The truck’s fares were Rs 500. The engineers charged Rs 500 for the installation. The cost of the machine is?

A

Rs 1,000

B

Rs 1,500

C

Rs 2,000

D

Rs 2,500

Accountancy and Book Keeping Accountancy and Book Keeping
Correct Answer : C
Explanation :

Rs 2,000

Correct Answered :

Wrong Answered :

10. Depreciable amount =

A

Cost of an asset + Residual value

B

Cost of an asset – Residual value

C

Residual value – Cost of an asset

D

None of these

Accountancy and Book Keeping Accountancy and Book Keeping
Correct Answer : B
Explanation :

Depreciation is referred to as the reduction in the cost of a fixed asset in sequential order, due to wear and tear until the asset becomes obsolete.

Correct Answered :

Wrong Answered :

11. The accounting process of allocation cost of intangible assets is called:

A

Amortization

B

Depletion

C

Going Concern

D

Residual Value

Accountancy and Book Keeping Accountancy and Book Keeping
Correct Answer : A
Explanation :

The process of allocating the cost of intangible assets to expense is called amortization, and companies almost always use the straight‐line method to amortize intangible assets.

Correct Answered :

Wrong Answered :

12. The process of recording consumption of natural resources (or wasting assets) is called

A

Amortization

B

Depletion

C

Going Concern

D

Residual Value

Accountancy and Book Keeping Accountancy and Book Keeping
Correct Answer : B
Explanation :

The process of recording consumption of natural resources is called deplition.

Correct Answered :

Wrong Answered :

13. The concept that the enterprise will continue in a foreseeable future is known as:

A

Amortization

B

Depletion

C

Going Concern

D

Residual Value

Accountancy and Book Keeping Accountancy and Book Keeping
Correct Answer : C
Explanation :

The concept of going concern assumes that a business firm would continue to carry out its operations indefinitely.

Correct Answered :

Wrong Answered :

14. What from the following is NOT a capital expense?

A

Purchase of Property

B

Purchase of Office equipment

C

Replacement of Vehcile

D

Repair of vehicle

Accountancy and Book Keeping Accountancy and Book Keeping
Correct Answer : D
Explanation :

Capital expenditures (CapEx) are funds used by a company to acquire, upgrade, and maintain physical assets such as property, plants, buildings, technology, or equipment. CapEx is often used to undertake new projects or investments by a company.

Correct Answered :

Wrong Answered :

15. Which of the following is not a business transaction:

A

Purchasing Office supplies

B

Hiring a new Employee

C

Paying interest on business loan

D

Receiving fee for services

Accountancy and Book Keeping Accountancy and Book Keeping
Correct Answer : B
Explanation :

A business transaction is an economic event with a third party that is recorded in an organizations accounting system. Such a transaction must be measurable in money.

Correct Answered :

Wrong Answered :

16. A company is owned by its:

A

Directors

B

Employees

C

Shareholders

D

Managers

Accountancy and Book Keeping Accountancy and Book Keeping
Correct Answer : C
Explanation :

A company owned by the shareholders.

Correct Answered :

Wrong Answered :

17. There is a debit balance on the office expenses at the end of the financial year. In which section of the balance sheet this will be recorded:

A

Capital

B

Current Assets

C

Current Liabilities

D

Fixed Assets

Accountancy and Book Keeping Accountancy and Book Keeping
Correct Answer : B
Explanation :

Current Assets is the correct answer.

Correct Answered :

Wrong Answered :

18. Which of the following book is both a journal and a ledger:

A

Cash Book

B

Sales Day Book

C

Trial Balance

D

Journal Proper

Accountancy and Book Keeping Accounts Assistant LAHDC
Correct Answer : A
Explanation :

The Cash Book is also a ledger in the sense that it serves the purpose of a Cash A/c also. When a Cash Book is prepared, no separate Cash account is opened in the ledger. As such, the Cash Book is a journal as well as a ledger and hence it may be called Journalised ledger.

Correct Answered :

Wrong Answered :

19. Income and Expenditure Account is a:

A

Nominal Account

B

Real Account

C

Personal Account

D

Artificial Personal Account q

Accountancy and Book Keeping Accounts Assistant LAHDC
Correct Answer : A
Explanation :

Nominal Account

Correct Answered :

Wrong Answered :

20. Which of the following is of capital nature:

A

Commission on purchases

B

Cost of repairs

C

Rent of factory

D

Wages paid for installation of machinery

Accountancy and Book Keeping Accounts Assistant LAHDC
Correct Answer : D
Explanation :

Wages paid for installation of machinery

Correct Answered :

Wrong Answered :

21. Which of the following is not a Fundamental Accounting Assumption:

A

Going Concern

B

Consistency

C

Accrual

D

Business Entity

Accountancy and Book Keeping Accounts Assistant LAHDC
Correct Answer : D
Explanation :

Business Entity

Correct Answered :

Wrong Answered :

22. Verification refers to:

A

Examination of journal and ledger

B

Examination of vouchers related to assets

C

Examining the physical existence and valuation of assets

D

Calculation of value of assets

Accountancy and Book Keeping Accounts Assistant LAHDC
Correct Answer : C
Explanation :

Examining the physical existence and valuation of assets

Correct Answered :

Wrong Answered :

23. Double entry accounting system includes:

A

Accrual accounting only

B

Cash accounting only

C

Both cash and accrual accounting

D

None of the above

Accountancy and Book Keeping Accounts Assistant LAHDC
Correct Answer : C
Explanation :

Both cash and accrual accounting

Correct Answered :

Wrong Answered :

24. If a fixed amount is withdrawn on the first day of every month of calendar year by a partner in partnership firm, then for what period the interest on the total amount of drawings will be calculated:

A

4.5 months

B

5.5 months

C

6.5 months

D

7.5 months

Accountancy and Book Keeping Accounts Assistant LAHDC VERIFIED
Correct Answer : C
Explanation :

If a fixed amount is withdrawn on first day of every month of the calendar year, the interest on the total amount of drawings will be calculated for 6.5 months. Average period will be calculated as:- = Months left after first drawing + months left after last drawing  = (12 + 1)/2  = 6.5 months

Correct Answered :

Wrong Answered :

25. A profit on sale of furniture of a club will be taken to:

A

Cash Account:

B

Receipts and Payment Account

C

Income and Expenditure Account

D

Profit and Loss Account

Accountancy and Book Keeping Accounts Assistant LAHDC
Correct Answer : C
Explanation :

Income and Expenditure Account

Correct Answered :

Wrong Answered :

26. Closing stock is recorded in the:

A

Profit and Loss Account

B

Trading Account and Balance Sheet

C

Balance Sheet Only

D

None of the above

Accountancy and Book Keeping Accounts Assistant LAHDC
Correct Answer : B
Explanation :

Trading Account and Balance Sheet

Correct Answered :

Wrong Answered :

27. What is the amount of purchase when opening stock is ₹10000, closing stock is ₹8000, sales are ₹110000 and cost of goods sold is ₹80000?

A

₹78000

B

₹ 82000

C

₹ 30000

D

₹ 92000

Accountancy and Book Keeping Accounts Assistant LAHDC
Correct Answer : A
Explanation :

₹78000

Correct Answered :

Wrong Answered :

28. The excess of the credit side of profit and loss account would indicate:

A

profit

B

net loss

C

loss

D

None of these

Accountancy and Book Keeping Accounts Assistant LAHDC
Correct Answer : A
Explanation :

profit

Correct Answered :

Wrong Answered :

29. In the absence of partnership deed, partners are not entitled to receive:

A

Salaries

B

Commission

C

Interest on Capital

D

All of the above

Accountancy and Book Keeping Accounts Assistant LAHDC
Correct Answer : D
Explanation :

All of the above

Correct Answered :

Wrong Answered :

30. Cash payments are recorded on the _________of the cash book:

A

Debit side

B

Credit side

C

Both sides

D

None of the Above

Accountancy and Book Keeping Accounts Assistant LAHDC
Correct Answer : B
Explanation :

Credit side

Correct Answered :

Wrong Answered :

31. Which of the following account will be credited, if business bought goods on credit from Mr. X:

A

Purchases account

B

Mr. X Account

C

Cash account

D

Sales account

Accountancy and Book Keeping Accounts Assistant LAHDC
Correct Answer : B
Explanation :

Mr. X Account

Correct Answered :

Wrong Answered :

32. Which of the following item will be shown on debit side of debtors account:

A

Discount received

B

Discount given

C

Discount allowed

D

Credit sales

Accountancy and Book Keeping Accounts Assistant LAHDC
Correct Answer : D
Explanation :

Credit sales

Correct Answered :

Wrong Answered :

33. The________ accounting system provides a system of checks and balances:

A

Single Entry

B

Financial Entry

C

Double Entry

D

Triple Entry

Accountancy and Book Keeping Accounts Assistant LAHDC
Correct Answer : C
Explanation :

Double Entry

Correct Answered :

Wrong Answered :

34. Interest on capital in a business can be defined as:

A

Expense

B

Income

C

Liability

D

Asset

Accountancy and Book Keeping Accounts Assistant LAHDC
Correct Answer : A
Explanation :

Expense

Correct Answered :

Wrong Answered :

CONTACT US

  • J & K

  • admin@prepmart.in

  • LIKE AND SHARE YOUR EXPERIENCE

    Like Us on Facebook Join Us on Telegram
    VISITORS COUNT 9 9 6 1 5 1
    Developed By : Azhar Rashid Teli